Dublin, Lux, Paris get Brexit asset management boost

The Irish capital looks set to become the big winner over other EU cities when it comes to hoovering up asset management jobs from the UK.

As many as 41 asset managers have so far moved part of their business or staff to Ireland in the context of Brexit, according to the think-tank New Financial. This is out of 115 financial firms in total. A further 37 managers have made the city their EU hub.

The numbers are a boon for Ireland. As well as already being a major domicile for Ucits funds (mutual funds that are able to be sold more or less without red-tape across the EU) Dublin is also already home to a large hedge fund operations industry.

The Irish capital’s largest competitor – both for investment funds and alternative funds – is Luxembourg. Luxembourg placed second (after Ireland) in the New Financial list.

But it is Paris, which placed third in the list, that gets the Lens’s attention. The Lens was in Paris recently, meeting with a number of large French firms.

Paris has made a major Brexit play. The asset management industry there, along with its regulator, launched an initiative called ‘Frog’ at around the time of the UK’s EU referendum. The French will be well aware of the derogatory nature of this word when spoken by the British about their cousins over the Channel, so it certainly looked provocative to have the term fired back at the UK as France made a blatant bid to entice asset managers away from London.

Frog, incidentally, stands for ‘French Routes and Opportunities Garden’ and along with asset managers, the French hope to persuade London fintechs that Paris is the best route into the wider EU market after Brexit.

In trying to attract asset managers from London, Paris will have its eye on large US firms. But it’s often said that the Americans don’t want the hassle of learning French – and language is partly why US firms have historically placed their funds in Dublin, a strategic decision made when US firms want to expand abroad.

It is notable that asset managers who have so far moved business or increased local hires in Dublin include American firms AllianceBernstein, Franklin Templeton, Goldman Sachs Asset Management and BlackRock.

Paris will be realistic about its competitive position with Dublin, but firms there boasted to the Lens of how Esma, the European ‘super’ financial regulator, has been based in Paris for years, and even more significantly, of how the European Banking Authority is set to relocate to Paris – from London – after Brexit.

The Brexit play is far from finished and good number of UK-based fund houses may still decide the critical mass Paris is gaining is enough to make them cross the Channel. After all, it’s only a short hop.